Justin D. Whatcott Acting United States Attorney for the District of Idaho | Department of Justice
An Idaho executive has pleaded guilty to insider trading after using confidential information about a corporate acquisition for personal gain, according to the U.S. Department of Justice.
Michael Smith, 48, from Eagle, Idaho, served as President and Chief Operating Officer of an Idaho-based company listed on NASDAQ since June 2022. Court documents state that by at least June 2024, Smith had access to material nonpublic information (MNPI) regarding an upcoming acquisition of his company.
Despite being subject to the company's Insider Trading Policy—which prohibited employees from trading shares when in possession of MNPI—Smith purchased stock in his company on July 26, 2024. He used a brokerage account belonging to an individual with whom he had a close personal relationship.
On August 7, 2024, when news of the acquisition became public and the company's stock price rose by nearly 50%, Smith sold the previously purchased shares for Individual-A, making a profit of approximately $145,754.69.
Smith admitted executing these trades based on MNPI about the impending acquisition despite knowing such actions were prohibited. The trades were made to benefit Individual-A financially.
Smith pleaded guilty to one count of securities fraud and faces up to 20 years in prison. Sentencing will be determined by a federal district court judge who will consider both statutory factors and the U.S. Sentencing Guidelines.
"Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division; U.S. Attorney Bart M. Davis for the District of Idaho; and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service Criminal Investigations Group (USPIS-CI) made the announcement."
The case is being investigated by USPIS-CI and prosecuted by Trial Attorneys Kyle Crawford and John Liolos from the Criminal Division’s Fraud Section along with Assistant U.S. Attorney Sean Mazorol for the District of Idaho.
